Dollar drops as investors embrace risk ahead of US jobs data

Wednesday, 4 Sep 2013 | 4:08 PM ETReuters

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The dollar dropped against the euro on Wednesday for the first time in six sessions and retreated from a six-week high against a basket of currencies as data reflecting a growing world economy boosted investors' risk appetite.

After notching significant gains in recent days, the greenback's weakness was the most pronounced against growth-linked currencies, with the Australian and New Zealand dollars both rising more than 1 percent.

While the greenback remains widely sought for its status as a safe haven amid uncertainty surrounding a possible U.S.-led attack on Syria, investors opted to book profits ahead of Friday's key U.S. nonfarm payrolls report.

Strong August job gains could cement expectations that the Federal Reserve will announce plans to trim its stimulus when it meets later this month, which should buoy the dollar.

The dollar index, which is strongly correlated with U.S. 10-year Treasury yields, was down 0.3 percent at 82.14, below Tuesday's peak of 82.516, its highest since July 22.

The dollar last traded up 0.1 percent at 99.63 yen, according to Reuters data.

The euro was last up 0.3 percent at $1.3212, far above Tuesday's trough of $1.3137, its lowest since late July.